Living Trusts – Do Your Homework

Mostly true. But if the estate is small (under $150,000 ), the will
does not need to be probated.

Probate is bad.

Depends. Probate is expensive and lengthy. But there are situations,
such as with contentious heirs, where the family is protected by court
supervision.

Your choices are either a trust or a will.

False. It’s not either/or. Standard estate planning supplies both: a
pourover will with a living trust.

You, or you and your spouse, are the trustees
of the Living Trust.

True

You can change or cancel the arrangement at any
time.

True

As trustee, you manage Trust assets for your
own benefit.

True

You can transfer all your assets to the Living
Trust.

False. You can’t transfer retirement accounts.

If you establish a Living Trust, your assets
will pass through the trust.

False. After the trust is created, it must be
funded. Assets must proactively be transferred into the trust.

A Living Trust (or revocable trust) saves on
estate taxes.

Not really. The lifetime estate tax exemption and unlimited marital
exemptions apply regardless of whether assets pass through a trust.

Living Trusts provide asset protection.

False

Living Trusts shield the family home shields
from Medi-Cal.

False

There are some very good reasons for drafting a Trust. (Avoiding probate, avoiding conservatorship, providing for orderly distribution of assets at death.) However, it is important to get good advice from an estate planning attorney before making your estate planning decisions. (He or she can explain.) “Do-it-yourself” kits are fine if (1) they’re well-written and (2) you know what you’re doing. The results of just “taking a stab at it” could be disastrous. Estate planning matters. Doing it right is yet another gift to your heirs.

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